That's true for the 70-plus growers who make up the Premium Ag Products (PAP) cooperative, based in northeast Missouri, near Hannibal. Although many of the producers grow transgenic corn and soybeans, three years ago they decided to try and tap into non-GM contract opportunities that paid a premium.

The vast majority of PAP's contracts are geared to producing non-GM soybeans that address the demand for food-grade products in Asian markets. Such markets offer a variety of cost-effective, protein-rich foods such as tofu, natto, miso, soy sauce and soy milk. Contracts for non-GM soybeans typically offer a $1/bu. premium over the Chicago Board of Trade futures and, quite often, more than that.

G. W. Dimmitt, PAP general manager, says PAP members earn roughly a $1/bu. premium for hard-endosperm corn, their top-end corn product, while premiums for high-extractable-starch corn range from $0.30 to $0.75/bu. The cooperative markets the bulk of its non-GM corn to a buyer in Japan.

“They're looking for hard-endosperm corn with a lot of starch for snack foods,” Dimmitt says. “They like the color of the corn. Plus, they want a product that doesn't break easily for better transferability.”

Despite PAP's success, Dimmitt says 2009 was a particularly tough year for tapping into non-GM corn and soybean markets. “The non-GM soybean market is increasingly competitive and looking for better quality overall with higher protein in particular,” he says, noting that he expects cooperative members will respond to the demand by growing varieties with higher protein content this year.

Identity preservation

Bruce Abbe, executive director for the Midwest Shippers Association (MSA), Eden Prairie, MN, says finding non-GM corn contracts and then producing the quality of product needed to meet that demand can be more challenging than what growers face with non-GM soybeans. “In some areas, there aren't as many companies offering non-GM corn contracts,” he says. “It depends upon where you're located. Farmers near the river shipping corridors tend to have more options to grow identity-preserved, premium corn.”

John Whittle, specialty grains merchandiser for CHS, agrees. He says growers can find non-GM opportunities if they look at variety- and hybrid-specific markets. “It's a pretty stable market for us,” he says. “We do offer some contracts to farmers, but they're filled quickly.”

Abbe says MSA has several member companies that offer a premium for non-GM corn, which is used in a variety of products, including food-grade blue corn for chips, special uses like domestic whiskey brewing, and for export for animal feed. One MSA member company contracts with U.S. farmers to grow non-GM red corn hybrids that are processed to extract the red color for the production of natural food coloring ingredients.

“Some of these are small markets, but they are out here,” Abbe says. “Farmers have to take the steps to handle the crops carefully and identity-preserve them from planting to delivery, but that's doable and worth the premiums earned.”

Bennett agrees, saying the opportunities in Illinois for non-GM corn are fairly strong. “Much of our domestic non-GM corn serves the ever-growing tortilla market as the Latino population in the U.S. continues to grow,” Bennett says. “While our non-GM soy market continues to grow internationally, the demand in the U.S. is also increasing as consumers become more aware and choose non-GM for their families.”

Dimmitt says there is an increasing market need for growers who can produce high-quality, non-GM waxy corn. Starch from waxy corn is widely used as a thickener or stabilizer in pies, soups, baby food and other processed foods. It also has a good fit for use in industrial materials such as paper adhesives.

First things first

For growers interested in non-GM corn and soybean opportunities, the first step in the process is identifying and securing a buyer, Abbe says. Growers can find many of the available non-GM product contracts for 2010 by searching company Web sites (see sidebar).

The second most important factor growers need to evaluate is the quality of their management abilities. Bennett says successful non-GM growers understand that the final products must be conditioned properly, be identity preserved, meet certain tolerances, and then be marketed through traders who have access to the premium markets.

“We have a seed-to-plate tracking system, basically an audit trail, to ensure what we deliver to the customer,” he says.

The third factor is finding the right non-GM hybrids and soybean varieties. Pioneer, for one, continues to research and produce non-GM seed products to meet market demand, says Bill Belzer, Pioneer senior marketing manager for corn.

“These products are no different from GM products,” he says. “They have high yield built into them.”

Belzer says that, within Pioneer's non-GM development program, the company focuses its research on three areas: conventional yellow corn, waxy corn and white corn.

Dimmitt adds that stringent production practices are particularly important for non-GM corn, which cannot be cross-pollinated. “You need to grow non-GM corn at least 660 ft. from a GM variety,” he says. “You can also harvest 12 to 16 of the outside rows and segregate the corn from them to ensure the purity.”

Size of operation is not a significant factor in how growers are selected for contracts, Bennett says. “We'll work with a grower who can deliver a single truckload of a product to someone who can produce 100 truckloads,” he says.

The company likes contracting with diverse growers, Bennett says, in order to spread production risks and ensure a high-quality product. High quality is what the market ultimately demands.

Contracts for 2010

IF YOU'RE looking for an opportunity to grow non-genetically modified (GM) corn or soybeans in 2010, now is a good time to check out the contracts companies are starting to post online for grower consideration. Here are a few Web sites to help you get started:

Midwest Shippers works with producers, processors and export traders in a region encompassing parts of Iowa, Minnesota, North Dakota, South Dakota and Wisconsin. Check out MSA's “Types of Specialty Grains” company listings and its “Grower Contracts Available” service.

Clarkson Grain contracts with growers of non-GM soybeans in parts of Illinois, Indiana, Iowa and Missouri. Corn producers must be located in a narrower production area, within a 150-mile radius of east-central Illinois through southern Illinois and most of Indiana.

Since its organization in 1976, Specialty Grains, Gibson City, IL, has served many trading companies and processors in Japan, Korea, Mexico, Spain, Belgium and other European countries with their requirements for high-quality specialty grains.

Identity preservation is a significant requirement for anyone wanting to tap into opportunities to grow non-GM crops. For more information about the steps involved to meet identity preservation quality standards, contact your state seed trade association.